The purpose is to discover whether the market mechanism allocates people and firms to cities which benefit most from them in efficiency terms, or whether an alternative migratory flow of labor and capital, prodded by the Federal Government, would be economically more attractive. The study will make use of findings from a year-long effort, currently under way, analyzing the economic efficiency of 73 different metropolitan areas in the year 1967. The proposed study will examine census and survey data to see if firm and labor migration patterns of the 1965-1970 period tended to favor cities of the most efficient size categories. The study will also see to what extent Government taxation, expenditure and revenue sharing patterns exploit the efficiency aspects of the size distribution of cities.